Today was what would be called a flat day. No real movement in either direction for the majority of indices, except for the Russel 2000 that put in a Bullish Engulfing candlestick. A move of over 1%. Good job small caps. Anyway, lets get to my portfolio.
Starting at the top, AXP has been maintaining a very narrow trading range for a few weeks now. Because of this, the secondary indicators I use have been smoothed out to a point where directionality is hard to predict. It may break out to the positive side. I am setting a stop on my Put 25% under where I bought it and will let it ride itself out for at least another week.
The stock, CVX closed 6 cents above yesterdays close, but this is after opening below two of my previously drawn trend lines which intersect a couple days from now. On Friday, a high volume sell off day was put in and today the secondary indicators on both daily and weekly charts are showing signs of weakness. If tomorrow the value closes below my aforementioned trend lines, I will consider closing out my position. Ideally I should consider swapping out my Call for a Put, but I have just recently done this same swap in reverse. If I wasn't uncertain about this being subject to the wash sale rule, I would do the swap. The funny thing is that if I had left things alone, I would be almost right back where I was before the swap. Is it wrong for me to start hoping for higher gas prices?
Today, FPL closed up today after almost two weeks of consistent declines. This positive move, however, is on light volume and the close was below a lower trend line in a downward channel. The good news is that it is drastically oversold in both daily and weekly charts. The bad news is that I have held on to it way longer than I should have. I am almost 40% in the whole. I should have set my stop back at 1.95 and currently it is at 1.65. I really believe there is a reversal at this point, but I am not confident about the potential. I am unsure what to do. I will wait to see what tomorrow brings.
My second financial position, WFC, opened low but closed high today. Yesterday's low could possibly be the bottom of a upward channel that I have been expecting to see it make for the past few days. The daily indicators show the possibility of a directional reversal but the weeklies still indicate more downside potential. If there is going to be a bounce, this week should reveal it, and my decision to swap my Put for a Call will start to pan out. The funny thing is that if I had chosen to stay into my Put until this week, I would be up about 15% and swapping into a call position would be, potentially, more lucrative.
My last financial position, V, closed slightly higher today, but with little movement above the upper trend line of an upward channel. Both the daily and weekly chart have indications of an overbought condition with weakening momentum. Also, there is a higher-lows trend line that is tightening on this upward channel's upper trend line, so if it closes below this trend line of higher-lows, the upward momentum could be over and I could see a price recovery of my Put as it heads toward the lower trend line of the channel. Unfortunately, it will have to recover almost 40% of the original purchase price before I see any profit. That teaches me not to see when the next earnings report is.
Now for my commodity ETF's. First is SLV which closed almost a dollar over yesterday's close, putting me into the green on this position. I am expecting to see a net move of another dollar to the upside before it reverses again. If so, I will see about 90% profit on this position.
Finally, USO closed higher after starting near a trend line of higher-lows produced about a month ago. It still has about $2 worth of price movement before it hits its highest-high of the last quarter. However, it is showing overbought on the weekly charts and barely oversold on the daily charts. Not to mention there is the slightest indication of a trend of higher highs that my prevent it from gaining more than a dollar in price in the next day or so. And to add to the negativity, there wasn't a lot of volume behind the last couple days of upward movement. Again, is it wrong for me to start hoping for higher gas prices?
As far as the general market is concerned, the daily charts look like a reversal in price direction is appropriate to expect. However, if you look at the indicators on a weekly chart, the market is overbought, so any reversal in price direction can not be expected to break through the most recent highs of the past month. Be prepared for a cold winter in the market. That is my opinion, you can take it or leave it.
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